09/03/2018 0 Comments
What Happens to Your Assets after Bankruptcy?
Those who struggle with their finances may find themselves coming to a crossroads where they must decide how to resolve significant debt. Filing for bankruptcy in Kingston, Belleville or Trenton is far from the only debt solution available, but is arguably the most drastic because it seriously impacts your credit rating and ability to obtain credit, immediately ceases legal action that your creditors may have begun against you, and liquidates many of your assets.
If you make the decision to file for bankruptcy, a licensed insolvency trustee will act as the liaison between you and your creditors, following the regulations laid out by the Bankruptcy and Insolvency Act. He or she will often meet with you in advance to discuss and explain a few different options to handle your debt, then again to sign any applicable paperwork, and file the necessary documents on your behalf.
Assets Exempted from Bankruptcy
Many of your assets, those not exempted by the government, are repossessed to help pay off your debt to creditors. The various assets not taken away and liquidated include one vehicle not valued above what is prescribed or an amount of $6,600, clothes that are deemed necessary and ordinary, plus household furniture and other items such as utensils and food valued at a prescribed amount or just over $13,150.
Other items are tools of trade or tools for farming of a prescribed amount or up to approximately $11,300 and $29,100 respectively, and not exceeding 100 acres of land or 14 bushels of potatoes, as well as pensions, some life insurance policies and some RRSPs. In exchange for this, most of the debt you owe would be wiped clean, depending on whether it is secured or unsecured.
Other Drawbacks in Filing for Bankruptcy
The most significant drawback is the negative impact on your credit report. By filing for bankruptcy in Kingston, Belleville or Trenton, you receive the lowest possible rating of R9 on your credit score. Your bankruptcy is only cleared from your credit history after seven years of filing for bankruptcy for the first time. Further, you are only discharged from your bankruptcy after a minimum of nine months and up to a maximum of 21 months.
You are also required to obtain credit counselling from a Licensed Insolvency Trustee, like F.J. Zielski & Associates Inc., and must attend the first meeting within the ten to 60 days of filing. The second must be at least 30 days after the first and within 210 days after you declared bankruptcy. Both will involve learning how to improve your financial management to help you avoid facing debt again in the future.
Thinking About Bankruptcy in Kingston? Contact F.J. Zielski & Associates
Growing debt is no small matter, but resolving it does not have to be solitary and stressful. Licensed Insolvency Trustees are available for consultations to review your debt solutions with you, such as filing for bankruptcy in Kingston, Belleville or Trenton. F.J. Zielski & Associates Inc. offer helpful guidance to various clients to overcome financial struggles, protect as many assets as possible, and rebuild your life.